CEVA, Inc. Announces Second Quarter 2017 Financial Results
- Total revenue of $20.6 million, up 20% year-over-year
- All-time high quarterly licensing revenue of $10.4 million, up 38% year-over-year
- GAAP and non-GAAP fully diluted EPS growth of 31% and 33% year-over-year
- Thirteen agreements signed, including second portfolio license agreement
MOUNTAIN VIEW, Calif., Aug. 3, 2017 /PRNewswire/ -- CEVA, Inc. (NASDAQ: CEVA), the leading licensor of signal processing IP for smarter, connected devices, today announced its financial results for the second quarter ended June 30, 2017.
Total revenue for the second quarter of 2017 was $20.6 million, a 20% increase compared to $17.1 million reported for the second quarter of 2016. Second quarter 2017 licensing and related revenue was $10.4 million, an increase of 38% when compared to $7.5 million reported for the same quarter a year ago. Royalty revenue for the second quarter of 2017 was $10.2 million, an increase of 6% when compared to $9.6 million reported for the second quarter of 2016.
Gideon Wertheizer, Chief Executive Officer of CEVA, stated: "We are pleased to have delivered strong financial results that exceeded the high end of our guidance range. Our licensing business is thriving, with key industry players committing to our IP portfolio and roadmap. On royalties, we are encouraged by the consistent growth in shipments of our non-baseband products, including the initial shipments of CEVA-powered vision processors in smartphones and cellular processors in base stations. Overall, the strong demand for our technologies reaffirms the unique value of our broad product portfolio for the 'smart and connected' world."
GAAP net income for the second quarter of 2017 increased 44% to $3.9 million, compared to $2.7 million reported for the same period in 2016. GAAP diluted earnings per share for the second quarter of 2017 increased 31% to $0.17 from $0.13 a year ago. GAAP net income and diluted earnings per share for the second quarter of 2017 included a tax benefit of approximately $1.8 million as a result of the conclusion of a tax audit.
Non-GAAP net income and diluted earnings per share for the second quarter of 2017 were $6.3 million and $0.28, respectively, representing a 38% and 33% increase, respectively, over the $4.6 million and $0.21 reported for the second quarter of 2016. Non-GAAP net income and diluted earnings per share for the second quarter of 2017 excluded: (a) equity-based compensation expense, net of taxes, of $2.1 million, and (b) the impact of the amortization of acquired intangibles of $0.3 million associated with the acquisition of RivieraWaves. Net income and diluted earnings per share for the second quarter of 2016 excluded: (a) equity-based compensation expense, net of taxes, of $1.6 million, and (b) the impact of the amortization of acquired intangibles of $0.3 million associated with the acquisition of RivieraWaves.
During the quarter, CEVA completed thirteen license agreements. Seven of the agreements were for CEVA DSP cores, platforms and software, five were for CEVA connectivity IPs and one was a portfolio license agreement. Eleven of the licensing agreements signed during the quarter were for non-handset baseband applications and one was for a handset baseband application. Four were with first-time customers of CEVA. Customers' target markets for the licenses include smartphones, automotive ADAS, drones, surveillance cameras, wearables, industrial IoT and a variety of Bluetooth and Wi-Fi connected consumer and medical products. Geographically, six of the deals signed were in China, three were in the U.S., one was in Europe and three were in the APAC region.
Yaniv Arieli, Chief Financial Officer of CEVA, stated: "Our licensing business continues to go from strength to strength, resulting in both all-time record high licensing revenue for the second quarter and backlog for the third quarter, as well as a stellar sales pipeline. Notably, we signed a multi-year portfolio agreement with a major customer, further adding to our backlog. We also managed to further strengthen our balance sheet during the quarter, with our cash balance, marketable securities and bank deposits totaling $170 million, with no debt."
CEVA Conference Call
On August 03, 2017 CEVA management will conduct a conference call at 8:30 a.m. Eastern Time to discuss the operating performance for the quarter.
The conference call will be available via the following dial in numbers:
- U.S. Participants: Dial 1-844-435-0316 (Access Code: CEVA)
- International Participants: Dial +1-412-317-6365 (Access Code: CEVA)
The conference call will also be available live via webcast at the following link: https://www.webcaster4.com/Webcast/Page/984/21746. Please go to the web site at least fifteen minutes prior to the call to register, download and install any necessary audio software.
For those who cannot access the live broadcast, a replay will be available by dialing +1-877-344-7529 or +1-412-317-0088 (access code: 10110214) from one hour after the end of the call until 9:00 a.m. (Eastern Time) on August 10, 2017. The replay will also be available at CEVA's web site www.ceva-dsp.com.
About CEVA, Inc.
CEVA is the leading licensor of signal processing IP for a smarter, connected world. We partner with semiconductor companies and OEMs worldwide to create power-efficient, intelligent and connected devices for a range of end markets, including mobile, consumer, automotive, industrial and IoT. Our ultra-low-power IPs for vision, audio, communications and connectivity include comprehensive DSP-based platforms for LTE/LTE-A/5G baseband processing in handsets, infrastructure and machine-to-machine devices, advanced imaging, computer vision and deep learning for any camera-enabled device, audio/voice/speech and ultra-low power always-on/sensing applications for multiple IoT markets. For connectivity, we offer the industry's most widely adopted IPs for Bluetooth (low energy and dual mode), Wi-Fi (802.11 a/b/g/n/ac up to 4x4) and serial storage (SATA and SAS). Visit us at www.ceva-dsp.com and follow us on Twitter, YouTube and LinkedIn.
Forward Looking Statement
This press release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that if they materialize or prove incorrect, could cause the results of CEVA to differ materially from those expressed or implied by such forward-looking statements and assumptions. Forward-looking statements include Mr. Wertheizer's statements about the Company's licensing business thriving and the Company being encouraged by the consistent growth in shipments of its non-baseband products, as well as the unique value of the Company's broad product portfolio. Forward looking statements also include Mr. Arieli's statement about backlog for the third quarter and stellar sales pipeline. The risks, uncertainties and assumptions include: the ability of the CEVA DSP cores and other technologies to continue to be strong growth drivers for us; our success in penetrating new markets, including in non-baseband markets, and maintaining our market position in existing markets; our ability to diversify the company's royalty streams, the ability of products incorporating our technologies to achieve market acceptance, the speed and extent of the expansion of the 4G, 5G and LTE networks, the maturation of the IoT market, the effect of intense industry competition and consolidation, global chip market trends, the possibility that markets for CEVA's technologies may not develop as expected or that products incorporating our technologies do not achieve market acceptance; our ability to timely and successfully develop and introduce new technologies; and general market conditions and other risks relating to our business, including, but not limited to, those that are described from time to time in our SEC filings. CEVA assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.
| CEVA, INC. AND ITS SUBSIDIARIES |
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| CONDENSED CONSOLIDATED STATEMENTS OF INCOME – U.S. GAAP |
||||
| U.S. dollars in thousands, except per share data |
||||
| Three months ended |
Six months ended |
|||
| June 30, |
June 30, |
|||
| 2017 |
2016 |
2017 |
2016 |
|
| Unaudited |
||||
| Revenues: |
||||
| Licensing and related revenues |
$ 10,337 |
$ 7,470 |
$ 19,872 |
$ 16,120 |
| Royalties |
10,238 |
9,633 |
21,990 |
17,491 |
| Total revenues |
20,575 |
17,103 |
41,862 |
33,611 |
| Cost of revenues |
1,608 |
1,403 |
3,304 |
3,031 |
| Gross profit |
18,967 |
15,700 |
38,558 |
30,580 |
| Operating expenses: |
||||
| Research and development, net |
10,509 |
7,811 |
20,382 |
15,725 |
| Sales and marketing |
3,427 |
2,855 |
6,365 |
5,700 |
| General and administrative |
2,552 |
2,078 |
4,677 |
4,068 |
| Amortization of intangible assets |
309 |
309 |
618 |
618 |
| Total operating expenses |
16,797 |
13,053 |
32,042 |
26,111 |
| Operating income |
2,170 |
2,647 |
6,516 |
4,469 |
| Financial income, net |
755 |
561 |
1,326 |
1,002 |
| Income before taxes on income |
2,925 |
3,208 |
7,842 |
5,471 |
| Income taxes expense (benefit) |
(983) |
497 |
(173) |
960 |
| Net income |
3,908 |
2,711 |
8,015 |
4,511 |
| Basic net income per share |
$0.18 |
$0.13 |
$0.37 |
$0.22 |
| Diluted net income per share |
$0.17 |
$0.13 |
$0.36 |
$0.21 |
| Weighted-average number of Common Stock used in computation of net income per share (in thousands): |
||||
| Basic |
21,712 |
20,604 |
21,556 |
20,562 |
| Diluted |
22,563 |
21,371 |
22,376 |
21,149 |
| Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures |
||||
| U.S. Dollars in thousands, except per share amounts |
||||
| Three months ended |
Six months ended |
|||
| June 30 |
June 30 |
|||
| 2017 |
2016 |
2017 |
2016 |
|
| Unaudited |
||||
| GAAP net income |
$3,908 |
$2,711 |
$8,015 |
$4,511 |
| Equity-based compensation expense included in cost of revenue |
114 |
54 |
205 |
114 |
| Equity-based compensation expense included in research and development expenses |
972 |
775 |
1,843 |
1,421 |
| Equity-based compensation expense included in sales and marketing expenses |
370 |
255 |
659 |
502 |
| Equity-based compensation expense included in general and administrative expenses |
722 |
525 |
1,420 |
1,046 |
| Income tax benefit related to equity-based compensation expenses |
(69) |
(53) |
(184) |
(97) |
| Amortization of intangible assets related to RivieraWaves transaction |
309 |
309 |
618 |
618 |
| Non-GAAP net income |
$6,326 |
$4,576 |
$12,576 |
$8,115 |
| GAAP weighted-average number of Common Stock used in computation of diluted net income per share (in thousands) |
22,563 |
21,371 |
22,376 |
21,149 |
| Weighted-average number of shares related to outstanding stock-based awards (in thousands) |
269 |
344 |
315 |
397 |
| Weighted-average number of Common Stock used in computation of diluted earnings per share, excluding the above (in thousands ) |
22,832 |
21,715 |
22,691 |
21,546 |
| GAAP diluted net income per share |
$0.17 |
$0.13 |
$0.36 |
$0.21 |
| Equity-based compensation expense, net of taxes |
$0.10 |
$0.07 |
$0.16 |
$0.14 |
| Amortization of intangible assets related to RivieraWaves transaction |
$0.01 |
$0.01 |
$0.03 |
$0.03 |
| Non-GAAP diluted net income per share |
$0.28 |
$0.21 |
$0.55 |
$0.38 |
| CEVA, INC. AND ITS SUBSIDIARIES |
||
| CONDENSED CONSOLIDATED BALANCE SHEETS |
||
| (U.S. Dollars in thousands) |
||
| June 30, |
December 31, |
|
| 2017 |
2016 (*) |
|
| Unaudited |
Unaudited |
|
| ASSETS |
||
| Current assets: |
||
| Cash and cash equivalents |
$ 17,103 |
$ 18,401 |
| Marketable securities and short term bank deposits |
102,897 |
108,115 |
| Trade receivables, net |
10,389 |
15,044 |
| Prepaid expenses and other current assets |
4,819 |
3,152 |
| Total current assets |
135,208 |
144,712 |
| Long-term assets: |
||
| Bank deposits |
50,196 |
29,977 |
| Severance pay fund |
8,956 |
7,941 |
| Deferred tax assets |
2,701 |
2,252 |
| Property and equipment, net |
6,157 |
4,805 |
| Goodwill |
46,612 |
46,612 |
| Intangible assets, net |
2,360 |
2,978 |
| Other long term assets |
4,093 |
3,218 |
| Total assets |
$ 256,283 |
$ 242,495 |
| LIABILITIES AND STOCKHOLDERS' EQUITY |
||
| Current liabilities: |
||
| Trade payables |
$ 290 |
$ 571 |
| Deferred revenues |
3,388 |
6,258 |
| Accrued expenses and other payables |
13,502 |
15,766 |
| Total current liabilities |
17,180 |
22,595 |
| Long-term liabilities: |
||
| Accrued severance pay |
9,450 |
8,349 |
| Total liabilities |
26,630 |
30,944 |
| Stockholders' equity: |
||
| Common stock: |
22 |
21 |
| Additional paid in-capital |
213,504 |
212,103 |
| Treasury stock |
(29,060) |
(39,507) |
| Accumulated other comprehensive loss |
(278) |
(497) |
| Retained earnings |
45,465 |
39,431 |
| Total stockholders' equity |
229,653 |
211,551 |
| Total liabilities and stockholders' equity |
$ 256,283 |
$ 242,495 |
| (*) Derived from audited financial statements |
SOURCE CEVA, Inc.
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